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Znak it Znak it Presentation Transcript

  • by Znak, Inc.Paywall or Not To Paywall:Alternative SolutionsFeb 23rd 2012 – Paywall Strategies, LondonAll presented here materials, ideas and business concepts are confidential. They are the property of Znak, Inc.,a Delaware corporation; and, they cannot be used, copied, distributed nor shared in any form and means(the appropriate US and international laws apply). Znak it! Is a registered trademarks owned by Znak, Inc. TheZnak it! business idea and a micropayment solution are protected by the USA and international patent laws – NewUS Provisional Application No. 61/046,623 1
  • 2011 The Rise of the Paywall? “The metered wall is the coolest thing since the beginning of the WWW.” Steve Brill“The NYT paywall is working……it’s a dream.” Felix Salomon Copyright (C) 2009 by Znak, Inc. 2
  • 2012 – Paywalls RevisitedThe NY Times Paywall isStupid… Really Dumb Greg Satell “’a cartel of news’… ’walled gardens’…” Clay Shirky Copyright (C) 2009 by Znak, Inc. 3
  • Lessons LearnedPaywalls can be: Expensive to start;  It took the NYT two years technologically challenging; and $25 to $45 Million to costly to run/market. launch its „metered wall;‟  Additional $18 Million to promote it in 2011 alone;  Given the 390,000 new subscribers at the end of 2011 -- $110 to acquire one subscription;  Loss of traffic and ad revenue Copyright (C) 2009 by Znak, Inc. 4
  • Lessons LearnedPaywalls can be: Expensive to start;  Before paywall the NYT technologically challenging; traffic was about 39 - 41 costly to run Million uniques per month (US traffic only); Require large scale; conversion rates slow down &  Down 20% in Dec 2011; plateau; „silo effect;‟  With 390,000 subscribers – 1% visitors signed up;  Subs growth slowed from 124% Q1 to 20% in Q4 Copyright (C) 2009 by Znak, Inc. 5
  • Upside-down “Hockey Stick”124% 45% 20% Copyright (C) 2009 by Znak, Inc. 6 / 11
  • Lessons LearnedPaywalls can be: Expensive to start;  Long-term „blind‟ technologically challenging; commitment with up-front costly to run payment; no a la carte; Require large scale;  Substantial cost if multiple conversion rates slow down & sources/subs desired; plateau; „silo effect;‟  Registration (ID/PIN/cc „Walls,‟ after all – barriers to info) – can be lost/stolen; readers‟ access & engagement  50% apps have problems recognizing sub ID/plans. Copyright (C) 2009 by Znak, Inc. 7
  • Lessons LearnedPaywalls can be: Expensive to start;  One-way „engagement‟; technologically challenging; costly to run  Readers as buyers -- You pay, we deliver what WE Require large scale; want, incl. “free” content; conversion rates slow down & plateau; „silo effect;‟  All or nothing; „Walls,‟ after all – barriers to readers‟ access & engagement  Reliance on the most loyal (local) readers; passers-by (majority of all uniques) a Media/publisher-centric second category? Copyright (C) 2009 by Znak, Inc. 8
  • Need Something Better Copyright (C) 2009 by Znak, Inc. 9
  • Alternative to Paywall Copyright (C) 2009 by Znak, Inc. 10
  • What is it? For whom? Znak it! – an integrated premium content curation and monetizationContent Providers platform Znak it! – a frictionless, safe and private way to access premium content as-you-go Web Users Znak it! – a direct-to-userMarketers & promotion channel and marketAdvertisers research tool Copyright (C) 2009 by Znak, Inc. 11
  • A Win-Win-and-Win Solution Web users can buy Znaks (credits), using all types of transactions available online, i.e. credit cards, PayPal, bank transfer, etc. Or, they can earn Znaks and thus fund their Znaccounts through Marketers‟ programs Marketers – the Third Winner “Free” or ad-sponsored Znaks earned in exchange for a clickthrough (CTR) or an1 Znak = $0.01 or an action (CTA), e.g. answer toequivalent in other currencies a mini-survey/market poll; opt-in advertising, etc) or by reading product content paid for by a marketer Copyright (C) 2009 by Znak, Inc. 12
  • Business Model Options & Benefits Paywalls vs. Paygates such as Znak it!  SaaS -- no set up and system maintenance Expensive, low ROI; costs; up to 94% return; Require large scale;  Also for the “long tail;” truly World Wide; divide users into categories  Technology- and portal-agnostic;  Flexible, a la carte, on-demand access; Create „silo effect;‟  Supports different payment methods, incl. Closed, rigid, might donations and ad-sponsored access; cannibalize other sources of revenue;  User-centric, payment as social engagement, content sharing & recommendations; Media/publisher-centric ,  Private, intrinsically safe; can be used for not engaging anonymous access – without registration; frictionless Copyright (C) 2009 by Znak, Inc. 13
  • Znak it! Market Niche 120% Znak it! Payment Niche Cost of Znak it! as compared to 100% 102.90% PayPal chargesPercentage Commission Znak it! 80% PayPal Regular PayPal 60% Micropayments 52.90% 40% 27.90% 20% 21.67% 17.90% 8.85% 6.00% 5.40% 3.90% 0% $0.3 $0.6 $0.9 $1.2 $1.5 $1.8 $2.5 $5.0 $20.0 Transaction value Copyright (C) 2009 by Znak, Inc. 14
  • An Example – Online MagazineZnak it! icons embedded into anonline version of a magazine toindicate some extra content(pics) available for a fee or afeature piece with a free leadTen more Pictures of Polanski availablethrough Znak it Source: MaleMen Magazine. Poland Copyright (C) 2009 by Znak, Inc. 15
  • An Example – Online Newspaper Examples of Znak it! embeddable links and widgets – as payment gateways Customizable shapes Easy, copy-and-paste insertion of Znak it generated codes by PublishersFor the User: two clicks with the mouseto get access to and pay for selectedcontent. Payment authorization and fundtransfers done by the system in real time,SSL-encrypted Copyright (C) 2009 by Znak, Inc. 16
  • Frictionless Instant Access to Content Two mouse-clicks access and authorized payment; No delays, no need to leave content page or enter any codes, PINs Copyright (C) 2009 by Znak, Inc. 17
  • Samples of Successful ApplicationZnak it! was first presented during the 2008 Web 2.0 Expo in San Francisco.Until 2011, it was used mainly to monetize music and gamming sites.In April 2011, we developed a new version – won the Florin Award for the mostinnovative online transaction service (EPCA, Amsterdam)The current platform was launched in August 2011 (private beta) – 320 contentproviders and nearly 100,000 users have since registered.Now, we run several pilot projects with major content publishers, incl.:  two regional news/magazine publishers (C. America, E. Europe)  a photo sharing and media site, similar to Flicker (USA)  an online music service (USA, Europe)  producer of video content: sports, fashion & entertainment (global) Copyright (C) 2009 by Znak, Inc. 18
  • Pilot Cumulative ResultsBased on the first month of each of the 5 pilots (Nov 2011 – Jan 2012) Price/piece in Pieces of content No ZnaksVideo clip (sports) 15 199Music file (MP3 download) 90 99Article bundled w/photos 60 49Single article, free lead 30 39Crossword puzzle 30 25Photos 120 10 Total/average 345 52 1 Znak = $0.01 Copyright (C) 2009 by Znak, Inc. 19
  • Pilot Cumulative Results Price/piece in Pieces of content Qualified Clicks Clicks/piece ZnaksVideo clip (sports) 15 199 678 18.0% 45Music file (MP3 download) 90 99 1,297 34.4% 14Article bundled w/photos 60 49 465 12.3% 8Single article, free lead 30 39 397 10.5% 13Crossword puzzle 30 25 169 4.5% 6Photos 120 10 761 20.2% 6 Total/average 345 52 3,767 100% 11„Qualified clicks‟ equals content purchases – 3,767 out of 45,939 visits, or 8.2%.Assuming quality/user interest, etc., are all equal, then music is most popular overall;however, sport video clips get the most clicks per unit. Copyright (C) 2009 by Znak, Inc. 20
  • Pilot Cumulative Results Revenue/ Price/piece Qualified Revenue Pieces of content piece in Znaks Clicks in Znaks in ZnaksVideo clips (sports) 15 199 678 134,922 43.0% 8,995Music file (MP3 download) 90 99 1,297 128,403 41.0% 1,427Article bundled w/photos 60 49 465 22,785 7.3% 380Single article, free lead 30 39 397 15,483 4.9% 516Crossword puzzle 30 25 169 4,225 1.3% 141Photos 120 10 761 7,610 2.4% 63 Total/average 345 52 3,767 313,428 100% 908The average is nearly 91 US cents per piece of content, and 83 US cents per user action.We noted 1,281 unique users – each spending $2.45/mp during the pilot (auxiliary data) Copyright (C) 2009 by Znak, Inc. 21
  • 2012 The Year of the Dime & Nickel?“As the economy sputters along, look for sites helping you sellalmost anything you can imagine and making you a “fortune”–one micro payment at a time.” Lance Ulanoff, Mashable Copyright (C) 2009 by Znak, Inc. 22
  • Thank you Greg Golebiewski ggolebiewski@znak-it.com Znak, Inc , Sunnyvale CA, USA Warsaw, Poland Copyrights © 2011 by Znak Inc 23